If a perfectly competitive market is in equilibrium and market demand decreases,which of the following would happen?
A)both producer and consumer surplus would increase
B)both producer and consumer surplus would decrease
C)producer surplus would decrease and consumer surplus would increase
D)producer surplus would increase and consumer surplus would decrease
E)producer and consumer surplus would remain unchanged

Question

Quizplus · Accepted Answer

In a perfectly competitive market, a decrease in market demand leads to a lower equilibrium price and quantity, reducing both producer and consumer surplus.

If a Perfectly Competitive Market Is in Equilibrium and Market